Answer:
Firm's cash coverage ratio = 9.64
Explanation:
We know,
Cash coverage ratio = Cash and Cash equivalents ÷ current liabilities
However, as there is no such information regarding cash and cash equivalents and liabilities, we have to use alternative formula,
Firm's cash coverage ratio = (EBIT + Depreciation Expense) ÷ Fixed charges
Given,
EBIT = $400,000
Depreciation Expense = $24,000
Fixed charges = $44,000
Therefore,
Firm's cash coverage ratio = ($400,000 + 24,000) ÷ $44,000
Firm's cash coverage ratio = $424,000 ÷ $44,000
Firm's cash coverage ratio = 9.64
A convertible bond would let the investor exchange it for common stock
What is a convertible bond?
A convertible bond allows the investors (lender) to exchange the bond for something else within a given time under any conditions specified in the bond indenture.
How does a convertible bond work?
A convertible bond pays fixed-income interest payments, but can be converted into a predetermined number of common stock shares. The conversion from the bond to stock happens at specific times during the bond's life and is usually at the discretion of the bondholder.
Common stock :
Common stock is a security that represents ownership in a corporation. In a liquidation, common stockholders receive whatever assets remain after creditors, bondholders, and preferred stockholders are paid. There are different varieties of stocks traded in the market.
Learn more about common stock :
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Answer:
$89,674,000
Explanation:
As it is mentioned that the inventory cost is already incurred in the last year so in this case the cost price would be zero and the same price should be equivalent to the closing value of the inventory i.e. carrying value of $89,674,000 and hence the same is to be considered
Therefore the last option is correct